Mobile Internet? Only Brits are stupid enough

Mobile broadband providers could be disappointed to discover there are fewer people round the world who want their services - except in the UK, where research shows we're happy to pay a whopping premium for mobility.

By
Peter Judge
| Apr 17, 2007

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Mobile broadband providers could be disappointed to discover there are fewer people round the world who want their services - except in the UK - where research shows we're happy to pay a whopping premium for mobility.

Internet users in the UK are willing to pay 28 percent more for mobile broadband (3G or similar) compared with the cost of a fixed connection, according to research by Parks Associates. US users will pay only 6 percent and other countries will pay even less.

This means that round the world, taking a price as low as $35 per month for mobile Internet, there still would be only 100 million people prepared to pay that price. The price people pay is even lower in countries with a mobile-data using culture like South Korea and Japan, Parks Associates found.

Business users are prepared to pay pretty much anything for their Internet access, of course, but there aren't enough of them to make the figures add up, according to Yuanzhe (Michael) Cai, director of broadband, Parks Associates: “Wireless broadband access services marketed by mobile carriers today resonate with road warriors and are having success in that segment,” he said, adding: “The road warrior market offers great ARPU [average revenue per user]potential but is limited in size."

Apart from road warriors, the majority of Internet users mostly access the Internet in fixed locations at home and in the office and "are unwilling to pay more for a subscription service they won’t use on a frequent basis,” said Cai.

To get beyond road warriors, the mobile operators will have to find a killer application, and figure out a way of doing something users actually want, he said: “In order to expand beyond this segment, mobile carriers need to provide application-centric rather than access-centric mobile broadband services and offer a variety of flexible business models that fit consumers’ usage patterns.”

While the survey could be a necessary corrective to the hype that has so far surrounded mobile broadband, it has hit some criticism: "I suspect that lack of understanding about the potential of mobile broadband came into play in this survey," said Lynette Luna, editor of FierceWiFi. So far all the marketing has been aimed at road warriors, so they are the only people who "get it".

Eighty percent of users went truly mobile in a $30-a-month Nextel trial of Flash-OFDM she says, quoting Don Stroberg, Sprint's vice president of 4G strategy. "Users bought the service with mobility usage in mind, but also realised they could cut the Internet cord at home," says Luna.

"I predict there will be significant pent-up demand if a variety of devices come to market at the right price," says Luna. "WiMax could potentially usurp both WiFi hotspots and DSL."